San Juan, PR- The Official Committee of Retired Government Employees (COR, for its acronym in Spanish), appointed by the United States Trustee in June 2017, is focusing all of its efforts to protect the collective interests of retired government employees and guarantee their pension benefits in the Title III cases of federal law PROMESA related to the Government of Puerto Rico.
“We fully support the position of the Government of Puerto Rico that excluded any adjustments to government pensions from the revised Fiscal Plan. We oppose the proposed cut by the Federal Oversight Management Board (FOMB) and continue to fight to resist this attempt against retirees,” said José Marín, a retired police sergeant.
“I guarantee that the COR is doing everything possible and using all the legal tools at hand to defend our pensions, which were already adjusted and presently 75% of government retirees receive a pension of $1,500 a month or less” said Marín.
Even if the FOMB were to certify a Fiscal Plan that included cuts to pension benefits, these cuts could not be imposed unless and until the Court confirms a plan of adjustment that also includes such cuts. The COR will continue to advocate against any cuts to pensions, whether in a proposed fiscal plan or in a plan of adjustment.
Regarding the letter sent by the federal court setting the deadline to file a proof of claim, the COR reiterated that government retirees don’t have to file a claim regarding their pensions and other retirement benefits. The COR represents the collective interests of the community of retirees in this specific matter.
Among the concrete actions that the COR is taking to defend the pensions and pension benefits of the community of 167,000 government retirees, are:
District Court Enters Bar Date Order: Retired Public Employees Do Not Need To File Proofs Of Claim For Pension Or Post-Employment Benefits
The Federal Court entered an order establishing deadlines and procedures to file proof of claims in Title III cases of the Government of Puerto Rico. The order, also known as Bar Date Order, establishes May 29, 2018 as the deadline to file said claims.
The Bar Date Order does not apply to claims for pensions or other post-retirement benefits, therefore, retired public employees do not need to file a proof of claim.
According to the order, the following groups are NOT required to file a proof of claims by the Bar Date’s deadlines to receive pensions or other post-retirement benefits:
It must be noted that the Federal Court’s Bar Date Order may apply to claims not related to retirement benefits, such as: tax reimbursements and damage claims, among other. If you believe you have such claims against the Commonwealth of Puerto Rico or other Title III debtor, please carefully review the Bar Date Order to determine if any deadline applies to your claims.
Read other updates here.
The Official Committee of Retired Government Employees (COR) issues statement regarding FOMB’s Letter to the Governor of Puerto Rico
San Juan, PR - On January 24, 2018, the Government of Puerto Rico released its new Fiscal Plan for Puerto Rico, which amends the Fiscal Plan that was certified by the Fiscal Oversight and Management Board (FOMB) in March 2017 to take into account the economic impact of Hurricanes Irma and Maria. On Monday, February 5, 2018, the FOMB issued a statement in response to the amended Fiscal Plan. Notwithstanding the devastating impact of hurricanes Irma and Maria on retirees and other residents of Puerto Rico, the FOMB reiterated its unchanged position from March 2017, that the Fiscal Plan must include (among other things) cuts of approximately 10% of the aggregate pension obligations and suggests the cuts be implemented progressively based on the size of pension benefits.
“The FOMB's statement serves to stress the importance of the Committee, and the Committee’s commitment to use all of the resources at hand to forcefully defend accrued public pensions in Puerto Rico. The Committee is working on these specific issues, together with the Government of Puerto Rico and other entities that have clearly expressed their desire to protect accrued public pensions and other retirement benefits of retirees,” said José Marín, president of the COR.
The Official Committee of Retired Employees from the Government of Puerto Rico (COR) was authorized and appointed by the United States Trustee to represent the collective interests of over 160,000 public retirees in Title III cases to restructure the debt of Puerto Rico under Federal Law PROMESA.
On January 30, 2018, the District Court issued its Opinion and Order dismissing the Complaint brought by certain holders of general obligation bonds (the “GO Bondholders”) in the ACP Master, Ltd. Adversary Proceeding (Adv. Pro. No. 17-189). The Court’s Opinion and Order incorporated many of arguments set forth in the Retiree Committee’s legal memorandum in support of the motion to dismiss the Complaint.
The GO Bondholders’ Complaint sought declaratory relief that the GO Bondholders held a first claim and lien on: (1) the proceeds of certain taxes and fees generally used to repay certain Government instrumentality obligations, which can be “clawed back” by the Government under certain circumstances; and (2) certain proceeds of property taxes levied pursuant to Act 83 of 1991. The Complaint also sought injunctive relief requiring the Government to segregate the funds at issue for the benefit of the GO Bondholders.
On August 4, 2017, the Retiree Committee filed a motion to intervene in the Adversary Proceeding, to which it attached a proposed motion to dismiss the Complaint on the basis that it was premature and in conflict with PROMESA. The Government filed a motion to dismiss the Complaint on August 21, 2017. On November 8, 2017, the District Court entered an order permitting the Retiree Committee to intervene in support of the Government’s motion to dismiss. Five days later, on November 13, 2017, the Retiree Committee filed its brief in support of the Government’s motion to dismiss, which repeated the arguments made in the Retiree Committee’s August 4, 2017 motion to dismiss.
The Court’s Opinion and Order
The Court’s Opinion and Order dismissed the Complaint in its entirety, but it did not determine certain of the legal issues presented in the Complaint. It adopted the Retiree Committee’s arguments that much of the Complaint was premature and not ripe for adjudication.
Most significantly, the Court dismissed the GO Bondholders’ declaratory judgment and injunction claims that sought to restrict the Government’s ongoing use of the tax proceeds at issue. The Court held that Section 305 of PROMESA, which limits the ability of the Court to interfere with the Government’s exercise of political or governmental powers, prohibited the Court from entering a “decree that the territorial government or its instrumentality must conduct its affairs in a manner different from the one it has chosen.”
With regard to the counts of the Complaint seeking declaratory judgment on the legal status of the GO Bondholders’ claims, including whether the GO Bondholders’ claims are secured and the nature and extent of any such security, the Court held that it lacked subject matter jurisdiction to consider those claims. The Court’s conclusion was based on its finding that those claims were not ripe for adjudication or did not establish an actual case or controversy.
Do you want to learn more about the COR? Read more here.
The COR analyzes Puerto Rico’s new Fiscal Plan to determine its potential impact on pensions and benefits
The team of legal and financial consultants for the Official Committee of Retirees of the Government of Puerto Rico (COR) is analyzing the revised Fiscal Plan presented by the Government of Puerto Rico on January 24, 2018 to determine its impact, if any, over the pensions and benefits of Government retirees.
Appointed by the United States Trustee on June 2017, the COR speaks in behalf of the community of over 160,000 retirees from the Government of PR in hearings and other legal proceedings to guarantee the protection of their collective interests of retirees.
The COR is responsible of revising any Fiscal Plan for the Government of Puerto Rico, and analyze all of the proposals presented by the Government of Puerto Rico to modify the pensions and other benefits currently received by retirees.
If you have not registered yet, and want to receive notifications and be informed about the latest news regarding the potential impact on your pension and benefits of Title III proceedings of PROMESA, register your information by clicking HERE.
Follow us on www.facebook.com/CORpuertorico/ to join the community of retirees and let your voice be heard.
Do you want to learn more about the COR? Read more here.
On January 24, the Government of Puerto Rico presented a new fiscal plan to The Financial Oversight and Management Board for Puerto Rico.
This past June, the Federal Trustee designated the Official Committee of Retired Employees of the Commonwealth of Puerto Rico to represent the collective interests of the retired employees of the Government of Puerto Rico in relation to Title III cases under PROMESA. This designation represents an important achievement, because it empowers public retirees with a strong voice to defend their pensions, benefits and well-being in Tittle III cases to restructure Puerto Rico’s debt.
Some may wonder what is the social and economic role of the community of public retirees and why is so important to protect the best interests of this group? The answer is simple, as retired employees from the Government of Puerto Rico we represent an economy of $2,500 million a year in income from pensions and benefits. We are an important consumer group, that spends most of its disposable income in Puerto Rico; and we play a leading role in our families and communities. We have decided to stay in Puerto Rico even though the overall cost of living here is higher compared to other jurisdictions in the United States.
In 2016, 23.3% of Puerto Rico’s population was over 60 years old. In this group 160,000 are retired employees from the Government of Puerto Rico, who receive a monthly pension and benefits for their years in public service. The average pension of a retired public employee in Puerto Rico is $1,100 a month, most of which is spent locally. Thanks to the community of retired employees from the Government of Puerto Rico there is a strong demand for services and products related to the health industry, including: doctors, health insurance, hospitals and pharmacies. In addition, our community of retired public employees represents an important market for supermarkets, cafeterias and restaurants, many of which have products and services specifically targeted to our community.
In social terms, the community of retired public employees in Puerto Rico plays a vital role. Many of us are required to take on important physical, emotional and financial responsibilities within our families and communities. As retired individuals we help raise and financially support our grandchildren and nephews while their parents finish studying or start building a professional career. We take care, feed and teach the younger generations after school keeping them safe and out of the streets. In our communities we become active in residents’ associations contributing to the well-being of our neighbors and neighborhoods. Furthermore, we get involved in our churches and community organizations where we do spiritual and social work. There are many public retirees that after retiring from public service in the Government of Puerto Rico continue to mentor young professionals.
As you can see, the community of public retirees with a pension from the Government of Puerto Rico is not a burden, but a valuable asset to our society. Defending our pensions and benefits as retirees means to protect the physical, emotional and financial well-being of an important sector of our society and economy.
COR LAUNCHES INFORMATION PROGRAM TARGETED TO THE COMMUNITY OF RETIRED EMPLOYEES FROM THE GOVERNMENT OF PUERTO RICO
The Official Committee of Retired Employees from the Commonwealth Government of Puerto Rico (COR, for its acronym in Spanish) unveiled its information program targeted to the community of 160,000 retirees from the Government of Puerto Rico and their families throughout the island. The main objective of this initiative is to employ a multi-media strategy to share official and reliable information related to the process to restructure Puerto Rico’s debt under Title III of the Federal Law PROMESA. Through the webpage www.porturetiro.com and our Facebook page facebook.com/COR Puerto Rico, the COR will distribute timely news and information related to ongoing process in the Federal Court to restructure the debt and the COR’s actions to protect, defend and guarantee the best interests of the retired employees of the Government of Puerto Rico.
The Committee was appointed on June 15, 2017 in response to a petition filed by the Pro Pensioners Movement. The COR is formed by 9 members representative of the different sectors of the community of public retirees, who were appointed by the United States Trustee.
“The COR has an official legal status with the important task of representing the collective interests of the retired government employees with a pension exclusively in issues related to the legal and mediation cases that are ongoing in the Federal Court to restructure Puerto Rico’s debt,” explained the retired Puerto Rico Police Sergeant, José Marín Martínez, president of the COR. “Through this program we aim to build an active community of retirees with a strong and educated voice to communicate its opinions and concerns in issues that could impact the future of their pensions and other benefits,” he added.
The COR invites all public retirees with a government pension and their families to visit www.porturetiro.com, where they will find more information and will have the opportunity to register to receive timely news.
“It is fundamental that the members of the community of public retirees receiving a pension from the Government of Puerto Rico understand the great responsibility that the Federal Court has bestowed on us by designating and official committee to represent our collective interests. For this reason, I also urge relatives and caretakers of public retirees with a pension to visit our information webpage to help us communicate this important message,” indicated Marín Martínez.
The Official Committee of Retired Employees from the Commonwealth Government of Puerto Rico (COR, for its acronym in Spanish) was authorized and appointed by the United States Trustee to represent the collective interests of the 160,000 public retirees in Title III cases to restructure the debt of Puerto Rico under the Federal Law PROMESA.
Financial Oversight and Management Board for Puerto Rico
2nd Listening Session
San Juan, Puerto Rico
My name is Jose Marin, a retired Sergeant of the Puerto Rico Police Force. I thank you for the opportunity to address you as the chairperson of the Official Committee of Retired Employee of the Commonwealth of Puerto Rico.
As you know, the Retiree Committee represents the interests of approximately 160,000 retirees, the vast majority of whom receive modest pension benefits -- on average $1,475 per month equating to less than $18,000 per year for retired teachers and on average just $1100 per month equating to approximately $13,000 per year for retired government workers. Many pensioners do not receive Social Security benefits and rely solely on their pensions for income. In addition, many pensioners support one or more other dependents - spouses, children, and extended family.
Our pensioners are people who entered into a simple but solemn agreement with the government - that in exchange for their labor, they would receive modest but reasonable compensation, including a deferred portion of their compensation in the form of a pension, never imagining that their claims for compensation would be threatened for compromise.
But as the economy in Puerto Rico has faltered in recent years, our retirees have already compromised their entitlements. Many retirees have experienced modifications to their pensions through legislative actions in the past several years, including the Pension Reforms of 2013. Employees who had already retired, saw a reduction of approximately 4% of their benefits and future retirees were subject to a reduction of approximately 15.2% because Special Laws were completely eliminated. Furthermore, the Pension Reform of 2013 greatly reduced the benefits of active participants under the “merit pension” of Act 447-1951.
Approximately 20,000 participants were affected by extending the time for retirement and by significantly reducing their pension benefit. If we take into account the modification of their future pension and the elimination of Special Laws, the total reduction of benefits, could reach up to 40% for participants under the “merit pension” of Act 447. Also, participants under Act 1-1990, that amounted to approximately 42,000 employees, saw reduction of pension benefits and the elimination of special laws.
We are all here today facing a new reality given the devastation wrought upon the island from Hurricanes Irma and Maria. We, like other stakeholders, have done historical research to identify case studies for what our island will experience over the next several years in the wake of these disasters.
We’ve looked at Dominica after Hurricane David in 1979 and we’ve looked at Louisiana and New Orleans following Hurricane Katrina in 2005. We’ve concluded that they are no perfect analogies to Puerto Rico, but we have also concluded that there are several key concepts/themes that will ultimately determine what our island looks like 10 years from now:
One key implication of this changing demographic is that if the Commonwealth is to transform itself and create a more welcoming business environment, the LAST thing it should be doing is further contracting the economy by reducing the income of the group that is not leaving the island today and that spends substantially all of its income on the island – the pensioners. Further downward pressure on pension benefits could have additional unintended consequences for Puerto Rico; reduced income could result in eligibility for other governmental programs that could prove more expensive to the Commonwealth like new entries to Mi Salud and other welfare programs.
Just some final thoughts with respect to pensioners. I noted at the start of my comments that our pensioners receive modest benefits, benefits that have already been reduced by recent Commonwealth actions in 2013. Almost 55% of pensioners receive $1,000 or less per month and almost 75% receive less than $1,500 per month. One would think that these numbers simply on their face are clearly modest amounts, but there’s been some talk about how these numbers compare to the federal poverty line which is about $1,000 per month for a single person.
Our view on this is very clear, this is the wrong benchmark for a host of reasons. As I’ve already stated, these pensions often support not one, but many people, across multiple generations, so comparison to a poverty level for an individual is not adequate. But a more fundamental reason is that the federal poverty calculation does not represent income sufficient for simple quality of life, including costs of food and the geographic variations in the cost of household expenses.
We are happy to work with the Commonwealth if needed to help define a more appropriate benchmark reflective of the true cost of living if that is helpful in putting the benefits of the pensioners into a more accurate context.
In closing, the impact of Hurricane Maria has only made the resources of pensioners more fragile and depleted and has made their lives more challenging. Many must now rebuild their homes and their lives, with little or no assistance from private insurance. One of the principal goals of the new Fiscal Plan is to bring economic stability to Puerto Rico. The retirees are an indispensable part of the economic fabric of the Island and their welfare is indispensable for the recovery of Puerto Rico. Under these circumstances, more than ever, the Retiree Committee hopes that the Oversight Board and AAFAF, as they amend the Fiscal Plan, will remember and maintain their concern for the protection of the most vulnerable in Puerto Rico, the pensioners.
While the Retiree Committee did not fully agree with the Fiscal Plan that was certified by the Oversight Board in March, the Committee noted the positive step reflected in the Plan, which acknowledges the unique and precarious position of the Commonwealth’s retirees, and the importance of this constituent group under Section 2.01 of PROMESA. We recognize that you have a great responsibility on your shoulders and we hope that this process will provide an equitable solution to all stakeholders and will result in a better future to all American citizens living in Puerto Rico.
It has been an honor to be able to share with you today our comments and thank you again for the opportunity.
José Marín, Chairperson
Official Committee of Retired Employees
of the Commonwealth of Puerto Rico
The passing of Hurricane María over Puerto Rico on September 20th did not alter the original objective of the Official Committee of Retired Employees of the Commonwealth of Puerto Rico (COR), which was appointed by the United States Trustee in June 2017, to collaborate in the recovery of Puerto Rico’s fiscal health and watch over the benefits of retired employees with a pension from the ELA in the process to restructure the debt under Title III of federal law PROMESA.
The damages and the aftermath caused by the storm forced the temporary closing of the U.S. District Court for the District of Puerto Rico. Although one party asked for a 90 day “stay” of any activity in the Title III Cases the United States District Court denied that request, which had already been objected by the COR, the Board, and the Government.
Nevertheless, the Title III Cases have been delayed, as the Island recovers from the destruction caused by María and a new Fiscal Plan that reflects the economic impact of Hurricane María is developed.
It is important to note that, at the COR we continue to closely watch and work with Title III proceedings and their impact on our pensions.
To obtain more information regarding the ongoing legal process and the actions taken by the COR in behalf of your wellbeing and the community of retired ELA employees in general visit www.porturetiro.com or via Facebook www.facebook.com/CORPuerto Rico.